Buying a Funeral Home in Ontario: Licences, Prepaid Contracts and What Actually Transfers

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 29 September 2026 · 11 min read — the Bereavement Authority licence you must apply for, who can own the business, how prepaid contracts and trust money move, and the paperwork that tells you what the business really earns.

What you are really buying

On paper a funeral home is a bundle of five things, and only some of them move to a buyer:

• The operator licence. Issued by the BAO to a named operator. It does not transfer. You apply for your own.
• The people. Funeral directors hold personal licences in their own names. They come with the business only if they choose to stay.
• The prepaid book. Contracts families signed years ago for funerals not yet held, with the money held in trust or funded by insurance. This is a liability as much as an asset.
• The premises. Holding room, possibly an embalming room, visitation rooms, a garage and vehicles, owned or leased.
• The name. Goodwill with local families, which may or may not survive a change of owner.

The premises side, including zoning and the rules for holding and embalming rooms, is in my companion post on funeral home premises in Ontario.

The licence does not transfer: the BAO application

Section 8 of the Act says no one may operate a funeral establishment unless licensed to do so, and section 14(2) says plainly that “A licence is not transferable.” The BAO’s licensing page puts it this way: anyone “purchasing an existing business must comply with all requirements for licensure.”

The BAO’s Business Licence Application for funeral establishments and transfer services (form dated May 2025) lists the application types: new business, purchase of existing business (with a box for share purchase or asset purchase), relocation, or upgrade from transfer service. The checklist for a purchase includes:

• evidence of transfer of ownership (asset purchase);
• corporate documents, including the shareholder register;
• police record checks and attestations for officers, directors and shareholders;
• debt financing information;
• proof of zoning, the occupancy permit and a copy of the lease;
• a list of prepaid contracts in force at the time of purchase and, for an asset purchase, a proposed letter to prepaid purchasers;
• liability insurance, contracts, price list, signage and a hazardous waste generator number.

The fees on the form are $611.17 for the licence application and $270.00 ($250 plus 8 percent PST) to the Compensation Fund.

The registrar can refuse if, in its opinion, the applicant or its managing employees lack “the integrity, honesty, experience and competence required”, if the applicant cannot provide the resources and facilities, or if the operation creates a risk to public health, safety or decency (s. 14(1)). Anyone with a beneficial interest, control, or who provided financing is an “interested person” (s. 14(3)), so lenders and silent partners are reviewed too.

Who may own a funeral home

The Act does not require the owner to be a funeral director. It does require the business to be run by one. Under O. Reg. 30/11, a Funeral Establishment Operator – Class 1 must have its day-to-day operations managed by a licensed Funeral Director – Class 1 or Class 2, and if the home embalms, by a Funeral Director – Class 1 (s. 33). A Class 2 establishment only maintains premises where remains are placed so people can pay their respects, and it also needs a licensed funeral director managing it (s. 34).

Two ownership points to check early:

• Cemetery operators. A board of trustees or organization set up to operate a cemetery generally cannot hold a funeral establishment licence (s. 14(1)(e)), with limited exceptions.
• Corporate disclosure. A corporate applicant must disclose anyone who owns or controls 10 percent or more of its equity shares (s. 15(1)). After licensing, share issues or transfers that cross that line must be reported within 30 days (s. 26), narrowed by the regulation to increases that give someone control.

If you are an investor rather than a funeral director, the deal only works if a licensed funeral director will manage the home.

Prepaid contracts and trust money

This is where funeral home deals go wrong. When a family prepays, section 52 of the Act requires the operator to hold the money in trust where the regulations say so, and older contracts signed before 2012 follow the trust rules of the old Acts. The operator must keep the registrar supplied with current copies of all trust agreements (O. Reg. 30/11, s. 106) and report any change of depositary or trustee within 15 days (s. 103).

On an asset purchase, the seller’s promises do not vanish. If a sale of the assets means the operator can no longer provide the contracted supplies and services at the location in the contract, the operator must give each purchaser written notice within 30 days, setting out their cancellation rights (s. 114). That is why the BAO asks buyers for a proposed letter to prepaid purchasers.

Before you sign, I would want your lawyer and accountant to:

1. match every prepaid contract on the list to a trust statement, an insurance policy or an annuity;
2. check the trust balance against the current price of the promised goods and services;
3. decide in the agreement who carries any shortfall.

Staff and funeral directors

Under section 9 of the Employment Standards Act, 2000, if you buy the business and keep the seller’s employees, their employment is not treated as ended, and their years with the seller count as years with you for notice, severance and vacation. That does not apply if you hire someone more than 13 weeks after the earlier of their last day with the seller and the day of sale.

Licensed staff also have paperwork of their own. A funeral director or preplanner must notify the registrar within 15 days of a change in employment (O. Reg. 30/11, s. 104), and the operator must report a change in the person managing a location within 15 days (s. 103). The BAO charges $107.60 for a notice of change in person in charge.

Asset sale or share sale, and HST

In an asset purchase you choose which liabilities to take and apply for your own licence. In a share purchase you inherit the company’s history, including the prepaid obligations, and the BAO form still treats it as a purchase of an existing business.

On HST, section 167 of the Excise Tax Act lets the seller and a buyer who acquires “all or substantially all of the property” needed to carry on the business jointly elect so that no GST/HST is payable on most of the sale. The election is not available if the seller is a registrant and the buyer is not, and it does not cover real property sold to a non-registrant. The buyer files it (CRA form GST44) by the due date of its return for the first period in which tax would have been payable. Your accountant should confirm it. The general trade-offs are in asset sale versus share sale.

What a funeral home is worth, and the documents to demand

No Canadian primary source publishes sale prices or multiples for funeral homes, and I will not quote one. Value comes from the evidence the seller can produce. Ask for:

Value the building separately from the business. The retirement home and pharmacy posts show the same split.

Where I fit

I work with commercial buyers and sellers across Toronto and the GTA. On a funeral home I help separate the real estate from the business and time closing around your BAO licence. When you have a target in mind, book a call or phone 833-330-1925.

Frequently asked questions

Sources

• Funeral, Burial and Cremation Services Act, 2002 — e-Laws — ss. 8, 14, 15, 26, 52
• O. Reg. 30/11 (General) under the FBCSA — e-Laws — licence classes, premises, notices, trust
• Bereavement Authority of Ontario — Licensing
• Bereavement Authority of Ontario — Business licence application (funeral establishment and transfer service) — purchase of an existing business, checklist and fees
• Bereavement Authority of Ontario — Fees — effective 1 November 2024
• Employment Standards Act, 2000 — e-Laws — s. 9, sale of a business and continuity of employment
• Excise Tax Act, section 167 — Justice Laws Website — joint election on the sale of a business
• Canada Revenue Agency — Form GST44 — election concerning the acquisition of a business

Related reading

• Funeral home premises in Ontario
• Buying a retirement home in Ontario
• Buying a private school in Ontario
• Buying a pharmacy in Ontario
• Buying a veterinary practice in Ontario
• Asset sale versus share sale
• Book a call with Jatin